HausInvest Returns to Spanish Real Estate Market

6 January 2020 – Real Assets IPE

Commerz Real’s €15.5bn HausInvest fund has returned to the Spanish real estate market after more than 14 years.

The German property fund is purchasing two office development projects in Barcelona off-plan for €130m from developer Conren Tramway.

It is the first time the fund has invested in Spain since it acquired the Espai Gironés shopping centre near Girona in 2005.

The two office buildings, which will be built on Carrer de Badajoz in Barcelona, will provide 13,900sqm and 9,300sqm of space, respectively.

Original story: Real Assets IPE

Edited by /Summary: Carmel Drake

Ghost Homes: 200 Buyers Lose €3M in Mallorca’s Biggest Real Estate Scam

30 August 2018 – The Local

Scores of budding homeowners on Spain’s biggest Balearic island have been defrauded out of their life savings after putting forward money for apartments that were never built or never existed.

On paper, real estate group Mallorca Investments offered clients the chance to buy apartments through local developer Lujo Casa for a price below the market average.

Budding homeowners would then give an advance of at least 10 per cent of the property price to the developer in order to supposedly tie down one of the apartments before it was built.

The new proprietors would even check that the plans were presented at city councils on the island, which would often instigate a request for a higher percentage from the developer, El País reported.

Some people put forward as much as €200,000 to own a luxury home in a coastal neighbourhood of Palma, Mallorca’s capital.

However, as time passed, construction work on the commissioned apartment buildings never seemed to get off the ground.

When the buyers demanded explanations from developer Lujo Casa, whose offices were shared with Mallorca Investments, no proper explanation was given.

“When we went months later to ask for explanations, the real estate agency had changed address and there were no employees from the building company either,” one of the buyers who put down first €23,500 euros and then €70,500 euros when the plans were presented at a town hall, told the Spanish daily.

“When we managed to contact them the real estate agency would ignore us or tell us they had no new information and that they had also been cheated.

“Nobody at the developer’s answered our e-mails either”.

This nonchalant and evasive reaction was part of the modus operandi of the property group, which according to Spanish Civil Guard sources could be behind the biggest real estate scam in the history of Spain’s Balearic Islands.

Following numerous official complaints from 50 of the disgruntled buyers – young, old, local and foreign – a covert investigation was carried out by Spanish authorities which led them to understand how the estate agency and the developer were operating together and how they were run by the same businessman.

A quick check online confirmed that the suspected scammer, an Italian man, was continuously sharing pictures on his social media accounts of his ostentatious jetsetter lifestyle, travelling business class to Dubai, popping bottles of the most expensive champagne and driving lavish sports cars through Mallorca.

The man, called M.P. by Spain’s Civil Guard, has been arrested and is awaiting trial for numerous counts of fraud.

But for the 200 people who put money forward for the ‘ghost homes’, many of whom sacrificed their life savings, there is little indication as to whether they’ll ever see their money or their properties materialize.

Original story: The Local

Edited by: Carmel Drake

 

Jesús Ger Starts Building Homes Again in Marina d’Or

24 May 2018 – Expansión

New homes are being built again in one of the major symbols of urban development along the Spanish coast: Marina d’Or. The developer and owner of a large proportion of the popular resort town of Oropesa (Castellón), Jesús Ger, has launched his first housing development, after more than a decade of paralysis due to the real estate crisis.

The new residential block will have 11 storeys and will house 286 apartments on one of the last remaining unbuilt plots on the beachfront of the tourist complex.

Nevertheless, the return to real estate activity has not materialised through the companies traditionally linked to Marina d’Or, but instead is being carried out by Inseryal, the property developer whose sole administrator is Sandra Rodrigues, the wife of Jesús Ger.

Inseryal has already started off-plan marketing of the homes in the so-called Edificio Miramar. The apartments, all of which are going to have two bedrooms in theory, will go on sale for upwards of €129,000 plus VAT. At those asking prices, the new block should generate revenues of at least €37 million for the property developer, which expects to complete this project in June 2020.

The first development in Marina d’Or since the crisis comes at the same time as the completion of the bankruptcy proceedings of Comervi, Ger’s main real estate company, which approved its creditors’ agreement a few weeks ago. The group became one of the most famous developers of holiday homes in Spain, with turnover of €345 million in 2007. Despite the debt, Ger has withstood the lean times thanks to the other branch of his business, tourist accommodation.

Original story: Expansión (by A.C.A.)

Translation: Carmel Drake

Málaga’s Residential Sector is Booming Once Again

11 March 2018 – Málaga Hoy

“We all want to be in Málaga because almost all of the cases there are successful. It is an established location (…)”. That is according to Juan Conejo, Director in Andalucía of the property developer Momentum, and his feelings are shared by the majority of the professionals in the sector who ratify that Málaga is, for the time being, the third largest market in Spain for the construction of new build homes, behind Madrid and Barcelona. This newspaper has been in contact with several of the most important property developers that operate on the Costa del Sol and all of them tell the same story: the crisis is over, the sector has reactivated and thousands of homes are being built or will be soon backed by multi-million investments.

Moreover, the complexion of the market has changed completely. The banks are no long financing the land purchases, but rather property developers are having to look for other resources – in-house, investment funds, asset sales, etc. – and they are only being granted loans to build homes if they can prove that at least 40%-50% of the homes have already been reserved, the famous pre-sales. Financial institutions only lend money if they find safe bets (…).

In this context, Málaga is becoming one of the great protagonists on the national stage because it is playing on several fronts. The capital is an important location for primary residence properties and the coast, primarily to the west of the capital, although there are also some projects to the east, is one of the most sought-after places for foreigners to have second homes.

“Málaga has clearly climbed onto the podium alongside Madrid and Barcelona and it is clear that the market has been reactivating for a year now, whereas other provinces such as Valencia and Sevilla are starting to see movement now”, explains Miguel Ángel Barruso, Director in Andalucía of Avantespacia, a property developer that is building 215 homes in two promotions in Tabacalera – where it has already sold 70% of the properties – and Teatinos, which will be handed over at the end of 2019. “Property developers have not sold any new homes for 10 years and there is significant pent-up demand on the buy-side, and so we are now looking ahead to the next few years with optimism”, added that expert.

Momentum is clear about its commitment to Málaga (…). “Málaga is growing a lot. We have a development in Teatinos that we were going to build in phases but which, in the end, we are going to construct in one go, comprising 300 homes in total, because we already have 50% of the properties reserved; meanwhile, in Colinas del Limonar, we have two other projects with the same level of pre-sales”, said Conejo (…).

Nevertheless, the Regional Director for Momentum emphasises that it is important to move with caution and to analyse each project in detail, especially in light of the current banking demands. “Starting a construction project now is already a success because it shows that you have pre-sold around half of the homes that you are going to build and it is always harder to get customers to buy off-plan, and so we have to analyse very clearly where the demand is”, he said.

Now, professionalism is key. Rafael Torres, Insur’s representative in Málaga (…). Insur is working on two major projects in Málaga capital in the Plaza del Teatro – where work on 57 homes has now started and 50% of the properties have been reserved, some of which have been paid for in their entirety – and in Churriana. It also has several projects in Marbella, comprising 300 more homes. Torres highlights that the market research conducted by his company reveals that there are 83 new home developments under construction or in the pre-sale phase on the western Costa del Sol, of which 40% are in Estepona, Mijas, Benalmádena, Marbella and Fuengirola.

One of the historical Málagan property developers in Myramar, which celebrates its 60th anniversary this year. Its CEO, Miguel Rodríguez (…) says that the company is currently working on four real estate developments in Mijas, Fuengirola and Benalmádena involving around 200 homes (…).

Meanwhile, Rafael Molina, Commercial Director at Grupo Ansan, also corroborates that the real estate sector is currently enjoying good times in the province (…) “we have developments underway in the Carlos Haya area, in Teatinos and in Puerto de la Torre, where we have already sold a significant volume”, he said.

Two other national companies that have set their sights on Málaga are Aelca and Neinor Homes. Jaime Pérez is the Director of Aelca in Andalucía and explains to this newspaper that “we are absolutely convinced about working in Málaga and we have land on which to build 3,200 homes in the province over the next four or five years”. In Málaga capital, his firm has started to market the first phase of an urbanisation in Hacienda Cabello comprising 128 homes – the total project involves 433 units – , they are going to start work in Bizcochero Capitán, they acquired the Flex building on the Cádiz Road and they are going to start to sell 130 homes and a retail area at the end of the year. They also have another project behind Vialia comprising 144 homes and a hotel. Moreover, they have projects in Mijas and Estepona.

Meanwhile, sources at Neinor explain that (…) “Málaga attracts domestic and international demand alike due to its location, infrastructure and climate (…)”. That firm’s portfolio of projects is also very extensive. At the moment, it has 20 plots and 2,166 homes in the province, which corresponds to a turnover of €780 million. In 2018, it is going to launch the sale of seven new projects, comprising 1,076 homes in total, in Casares, Estepona, Benahavís and Málaga capital (…).

Property developers are investing millions in Málaga because they know that there is demand there. Last year, permits were granted for 5,000 homes and, taking into account the projects that all of these companies have in the pipeline, that number looks set to soar over the next few years, which will generate more employment and wealth in the area.

Original story: Málaga Hoy (by Ángel Recio)

Translation: Carmel Drake

Aedas, Neinor & Aelca Start Building New Homes in Valencia

4 November 2017 – El Confidencial

(…) A sign that a new wave is coming to the real estate sector can be seen in the Nou Campanar neighbourhood of Valencia, one of the city’s areas of expansion, which was left frozen in time by the burst of the real estate bubble. For many years, an enormous plot of land measuring 12,000 m2 was a symbol of the indulgences of one of the leaders of the Valencian real estate sector, Juan Armiñana. He used to build his spectacular ‘fallero’ monument that won the Fallas competition year after year on that site (…)

Nevertheless, Arminñana, like many other local property developers, went bankrupt. And although he has now timidly returned to the sector, almost all of his assets ended up in the hands of the financial institutions. The large plot of land described above ended up on Sareb’s balance sheet, as collateral for a portfolio of loans. In turn, the bad bank sold those loans to the US investment fund Castlelake. Meanwhile, Aedas Homes, a listed property developer created by that fund, attended the Valencian real estate fair Urbe on Friday. There, it presented its plans for the city for the next two years, revealing that its star development is going to be located on the same iconic plot that used to be owned by Armiñana.

Aedas is one of the property developers of the day. It has arrived in Valencia as demand for new build properties is heating up, in parallel to the economic recovery. Since April, the firm has put almost 300 new homes on the market in Campanar, Quatre Carreres and Dénia, with the intention of putting the cranes to work early next year and handing over the homes in a couple of years. In turn, Aedas holds a portfolio of land and it is continuing to explore acquisitions, whenever the prices fall within acceptable ranges. (…).

Two of Aedas’s rivals, Neinor and Aelca, have also started to make a controlled landing in the Valencian market. The listed company led by Juan Velayos plans to build 500 homes per year in the Community of Valencia, which it considers its third largest market after Madrid and Barcelona. (…). The real estate company in which Lone Star holds stake has just purchased a plot of land for 200 homes in the neighbourhood of Benicalp and it already owns plots for another 450 homes in the neighbourhood of Malilla.

But, the player that has launched itself into the market without any qualms is Aelca. Although traditionally it has been very focused on Madrid, Barcelona and Málaga, the property developer founded by Javier Gómez and José Juan Martín has now launched developments to build up to 1,200 homes in Valencia. Its immediate projects, which are already being marketed, are located in the neighbourhoods of Patraix and Nou Campanar, and they will be joined by another residential building in the Cabecera Park area and another in Dénia. In Alicante, on the Playa de San Juan, Aelca is also working on its first project on the Levante Coast, Residencial Arenas, a residential complex executed in collaboration with Sabadell (…).

Aedas, Neinor and Aelca are the new kids on the block. But there are other players who have been in the market for a long time. Sareb is one of them. Until a few months ago, it was focusing on divesting its land and second-hand homes. The Community of Valencia is the second most active region in terms of sales for the bad bank behind Madrid, with 488 properties and €150 million of land sold since 2013, according to the entity’s CEO, Jaime Echegoyen. Now, Sareb has rolled up its sleeves and is trying to generate some value from the projects that are underway and unfinished from the banking portfolio that it received – more than €6.4 billion in properties and loans secured by real estate assets.

The bad bank has signed agreements with local property developers and construction companies to develop some of the assets that have not ended up in the hands of investment funds (…).

Another very active agent is CBRE Richard Ellis. It has sold more than 3,000 homes in recent years and has another 400 new build homes on the market in Valencia. These properties have been launched by funds and property developers such as Iberdrola Inmobiliaria, which has built a 58 home luxury residential building in Ruzafa and Q21 Real Estate, owned by the US fund Baupost, which has a presence in the so-called PAI of Quatre Carreres (…).

The volumes of off-plan sales are unprecedented in recent years. Developments that have been on the market for just six months are already reaching pre-sales ratios of 40% or 50% in Valencia and along the coast. These percentages mean that property developers are able to secure financing and improve the trust deposited in them by financial institutions (…).

Foreign property developers are also joining the activity being undertaken by the local players that survived the economic crisis. For example, Ficsa, the real estate brand of the Noguera family, has four developments underway in Valencia and its metropolitan area, with reservation rates of 50%. In addition, Parvasal, which has projects in Patriax and on Avenida Giorgeta (Patraix Plaça and Sosa Edificio) is in a similar position.

Metrovacesa, Grupo Lar, White Real Estate and IHomes also all have developments underway (…), which will be ready in 2019 (…).

Original story: El Confidencial (by Víctor Romero)

Translation: Carmel Drake

Neinor Plans To Build 400+ Homes/Year In Cataluña

30 April 2017 – El Confidencial

Neinor is the new kid on the block. Cataluña has traditionally been a territory reserved for local, family-owned property developers. However, the crisis of 2009 left a large gap in the market: it swept aside groups such as Promociones Habitat (Figueras) and Espais. And it reduced companies such as Vertix to their knees. Only Núñez i Navarro and, to a lesser extent, La Llave de Oró (Marsá) were able to resist the onslaught. But now, Neinor has arrived. And it not only occupies the podium, its property developments and investments to date already make it the largest property developer in Cataluña. (…).

Neinor has 28 plots of land in Cataluña and has already started construction work on 17 of them, with a corresponding investment of €400 million. These figures place it way ahead of all of the local developers. Sources in the real estate sector indicate that Neinor plans to construct more than 400 homes per year in Cataluña. No other developer will even come close to that pace. Nor did Núñez i Navarro, ever, even at the height of its reign.

Neinor Homes debuted on the stock market in March, with plans to grow a purely residential property development business – a very different initiative from the proposals made by the Socimis. The stock market listing has created a group worth more than €1,300 million, in which the major shareholder is the fund Lone Star, with a 39.5% stake. Moreover, other international funds such as Fidelity, FMR and Invesco have stakes ranging between 3% and 5%. Anglo-Saxon capitalism pure and simple, the complete opposite of the approach adopted by the traditional Catalan property developers, which were always wary of the stock market and its pitfalls.

Now, Neinor forecasts that Cataluña will account for a quarter of its property development activity in Spain. When the 28 developments are underway, Neinor will be building 1,951 units in total in the Catalan market alone.

Of the 880 units up for sale, 668 homes have already been purchased off-plan. In practice, that represents 76% of the total, a very high percentage for the sector, which demonstrates the buyer pressure at a time when demand is a lot higher than supply in Cataluña. According to Tinsa, new house prices rose by 8.2% in the Catalan market during 2016.

Barcelona – unfinished business

Despite this start, the city of Barcelona, with its endemic shortage of land, represents Neinor’s unfinished business. The firm has just one development in the Catalan capital, almost all of which has been sold and completed. (…).

Nevertheless, Neinor is trying to consolidate its position in the city and is currently evaluating several purchases, according to sources at the company.

Given its lack of presence in Barcelona, Neinor is pushing ahead with projects in nearby cities such as Sitges and Sant Cugat. Its most important project is in Plaza Europa, in L’Hospitalet de Llobregat (Cataluña’s second largest city), where it is planning to build two blocks of flats. Like in the case of its other developments, one of those towers has already been sold off-plan.

Second homes

Neinor is also planning to build second homes in Cataluña, like it is already doing in other markets, such as in Málaga. Nevertheless, it wants to limit those projects to 20% of the total volume that it builds in the Catalan market. (…).

Original story: El Confidencial (by Marcos Lamelas)

Translation: Carmel Drake

ST: Barcelona’s New Home Supply Could Run Out Within 12 Months

16 June 2016 – El Mundo

Sociedad de Tasación has published its ST New Home Census for 2016 for the province of Barcelona and Barcelona Capital. The company has provided the market with complete and detailed information about the supply of unsold new homes in the region, whereby updating the ST Census for 2014 to include the new supply of homes constructed during the last two years. In addition, it includes a breakdown of the properties by construction phase, price and surface area.

The study contains analysis of the municipalities that have more than 50,000 inhabitants in the province of Barcelona, as well as specific data about the capital. The municipalities analysed together account for almost 65% of the population and stock of existing homes in the region.

According to the report, currently only 725 of the 2,719 new homes registered for sale in 2014 are still on the market, which implies a reduction in the stock of 73.3%, in just two years. Moreover, 2,068 new units have been identified, which means that in total the current supply adds up to 2,793 homes. That figure represents a net stock increase of 2.7% compared with the ST Census for 2014.

In light of this data, ST Sociedad de Tasación’s Director General, Juan Fernández-Aceytuno, said that “if this rate of absorption of the new home stock continues, then the current supply could run out within 12 months in the province of Barcelona and within 14 months in the capital”.

In the city of Barcelona, only 215 of the 917 new homes up for sale in 2014 are still on the market, which means that 82.5% of the supply has been sold in two years. As well as the homes that have been on the market since 2014, 857 new homes have been put up for sale in the last two years, which means that the current supply amounts to 1,072 homes, a net increase in the total stock of 16.9% with respect to the ST Census for 2014.

The supply of off-plan homes increases

Fernández-Aceytuno also highlights changes in the composition of the housing stock: “As far as the construction phase is concerned, the supply of homes that have not been started has grown by 212% in the municipalities of Barcelona that have more than 50,000 inhabitants. As such, there has been a 45% reduction in the volume of finished homes included in the stock in 2016, which amounts to 834 units in total”, concluded Fernández-Aceytuno.

In the city of Barcelona, there has also been an increase in the number of off-plan homes, in this case by 150%, with respect to the data in 2014. Thus, whilst in 2014, the supply of finished homes accounted for 50.4% of the total, in 2016, they represented just 19.2%.

Increases in the average house size and the average price

The study reflects an increase in the average size of homes. Whilst in the ST Census for 2014, homes measuring less than 100 sqm accounted for 67.7% of the supply, they now represent just 47.6%.

Similarly, in 2016, the average price of new homes is higher in 2016 than in 2014. As such, homes worth more than €300,000 have increased from representing 26% of the stock in 2014, to 35.3% in 2016. (…).

Original story: El Mundo

Translation: Carmel Drake

Boadilla del Monte Sees A Flurry Of House Construction & Price Rises

13 June 2016 – El Confidencial

It’s been just over six months since, in October 2015, the Community of Madrid approved the General Urban Plan for Boadilla del Monte. The decision by Cristina Cifuentes released all of the construction permits that had been pending approval and gave the green light, once again, to the sale of land in one of the richest municipalities in Spain. It also marked the end of the development plans designed by the former mayor of Boadilla, Arturo González Panero, “the Albondiguilla”, imputed for the Gürtel case and against whom the prosecutor has just ordered 40 years in prison.

Since that Wednesday in October (28 October 2015), Boadilla del Monte has been a genuine real estate hotbed. Land sales have multiplied and the cranes have arrived in abundance. Buyers’ appetites have been so great that off-plan sales are practically covered and the first price rises have started to be seen – in some cases, close to double digits – for the new projects that are coming onto the market.

“The stars have aligned positively in Boadilla del Monte. Land there had been consolidated and developed and the only outstanding item was the approval of the General Plan, which was delayed due to the General Election. Once that had been ratified and blessed by the Community of Madrid, the new developments had the legal security to start without any problems”, explained Luis Corral, CEO of Foro Consultores.

The expert also thinks that the appeal of Boadilla has benefitted from the paralysis that, by contrast, its neighbour Pozuelo de Alarcón is experiencing. There, the new areas of development are currently awaiting the approval of a series of municipal infrastructures, such as the famous rain water collector, which is essential to meet the needs of the new neighbours. The infrastructure requires an investment of almost €60 million – double the amount predicted in 2007 –the cooperative owners that bought the land have to cover around €30 million and the other owners of the land and the Town Hall have to cover the remaining €25 million.

“The suspension of the largest development in Pozuelo has meant that much of the demand with medium-high purchasing power is moving to neighbouring towns such as Majadahonda and Boadilla del Monte”, said Samuel Población, the National Director of Residential and Land at the consultancy CBRE.

Price rises

(…). According to Luis Corral…”a family home or chalet in Boadilla costs around €450,000, on average, compared with between €700,000 and €1,000,000 in Pozuelo…”.

Although the supply of land is greater, the pressure from buyers due to the natural demand in Boadilla del Monte and the unmet demand in Pozuelo, will start to have an impact on prices. According to data from Foro Consultores, less than a year ago, in July 2015, the average price for chalets under cooperative regimes amounted to around €1,400 /sqm, whereas now the price has increased by around 7% to €1,500/sqm.

The same has happened with direct promotions. In July 2015, the price per sqm amounted to around €1,500 and now, it has increased to €1,600/sqm. In other words, prices have risen by 6%. At first sight, these prices do not seem at all exorbitant, however the homes are all very large and so the final price is not suitable for all budgets.

Four hot spots in Boadilla

In this Madrilenian municipality, one of the richest in Spain, there are four hot spots where all of the real estate activity is happening: El Pastel, Las Cárcavas, Cortijo Sur and Cortijo Norte. (…).

“El Pastel has been completely urbanised, it is full of cranes and families are already living there. Las Cárcavas is slightly behind, but the first homes are already being handed over and there are also a few people living there, whilst Cortijo Sur is also urbanised and under construction and the first homes will be handed over within the next few weeks. Cortijo Norte is the most delayed, it has not been urbanised yet, although work has begun on the urbanisation project. Family homes are being constructed in every area”, explained Luis Corral. (…).

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake

Supply Of New Homes In Madrid Increases By 68%

6 May 2016 – Knight Frank

We are talking about a changing trend in the new build residential market in Madrid. The projected supply is increasing significantly – up to 68% more construction permits were granted in 2015, the third consecutive year of increases – but that volume is still insufficient to satisfy demand. This is the main finding from the latest report about new-builds from the real estate consultancy firm Knight Frank.

Currently, the municipality of Madrid has a stock of around 3,000 new homes. 30% are located inside the M-30 (ring road), where supply is limited due to the shortage of land. The area between the M-30 and M-40 ring roads is home to 20% of the supply, whilst the remaining 50% is located, for the most part, in the PAUs.

The average absorption rate of the product supplied over the last year has been 37%. Most of this absorption has happened in the PAUs (12%), which indicates very reasonable levels in areas that are continuing to establish themselves.

According to Ernesto Tarazona, Managing Partner for Residential and Land at Knight Frank, “the lack of stock, together with the increase in demand has resulted in the sale of new build homes that have been on the market for years”.

In 2015, we saw how auto-promotion and cooperative activity decreased by 8%, in favour of traditional property developers. “Although it is a small percentage, the future trend points to a continuation of the positive recovery, to the extent that access for financing for property developers is more flexible”, said Tarazona.

The number of new build transactions increased by 15% with respect to the previous year. 73% of transactions were bought off plan and the remaining 27% were turn-key projects.

By area, the PAUs lead in terms of demand, with 48% and there, Valdebebas (20%) and the Ensanche de Vallecas (10%) stand out, in part due to the concentration of more affordable supply. The area inside the M-30 ring road comes next in the ranking, accounting for 23% of demand. There, the neighbourhoods of Tetuán (6%), Centro (4%) and Chamberí (4%) are the most popular. Finally, the area between the M-30 and the M-40 receives 18% of demand and the area beyond the M-40 accounts for 11%.

Original story: Knight Frank

Translation: Carmel Drake

Aguirre Newman Profiles Madrid’s Newest Homes

26 October 2015 – El Mundo

After seven years of continuous decreases, the prices of new homes for sale in Madrid (capital) are on the rise once again. Specifically, they have increased by 8.96% with respect to last year. Or at least, that is one of the findings of a report prepared by the consultancy Aguirre Newman, which studied homes for sale in 242 (unsubsidised) new developments (excluding cooperatives and homeowner associations) in the capital (149) and the Community of Madrid’s 23 main municipalities (122), between July and September 2015. According to the study, this increase is due to the price rises recorded in the most exclusive areas of the centre and north of the city, where demand is highest.

The capital

The report describes the profile of the average new home for sale in the municipality of Madrid: it has a surface area of 109 m2 and a final price of €320,405, i.e. costs €2,937/m2.

The most expensive developments are located in the neighbourhoods of Almagro (Chamberí), El Viso (Chamartín), La Piovera (Hortaleza), Goya and Castellana (Salamanca) and Justicia (Centro), where average prices currently range between €6,500/m2 and €7,000/m2. At the other end of the scale, the cheapest homes in Madrid are found in the districts of Villaverde, Villa de Vallecas and Carabanchel, with average prices of between €1,600/m2 and €1,800/m2.

Another important statistic reflected in the study is that the volume of new homes purchased in Madrid increased by 3% during the first half of 2015, in comparison with the same period last year. Specifically, 1,411 new homes were sold between January and June 2015. This rate of sales is associated with a significant decrease in the average sales periods, which, for a 60-home development have decreased to 17.2 months from 33.2 months last year. (…).

Other municipalities

In contrast to the capital, in the metropolitan area, the average price per m2 of high-rise homes (flats) decreased by 3.46% to €2,310/m2, well below the peak of 2009 (€3,367/m2). Sales in this area also decreased during H1 2015, by 13% with respect to those recorded during the same period in 2014.

The profile of the average home being sold in these municipalities has an average surface area of 130 m2 and a final price of €300,000. In the case of detached homes, the average price is €1,895/m2 with an average surface area that increases to 275m2.

The municipalities located along the A-1 and A-6 motorways are the most expensive, both in terms of multi-family homes and single family homes. Pozuelo de Alarcón is the most expensive town of all, where the average price of flats reaches €3,944/m2 and of detached homes reaches €3,123/m2. At the other end of the spectrum, the municipalities with the cheapest new homes for sale are Móstoles and Pinto, where flats cost no more than €1,400/m2 and detached homes cost €1,000/m2, almost three times less than in Pozuelo de Alarcón.

Outlook

Aguirre Newman considers that in the areas with the greatest level of activity in the centre and north of the city, where demand is greatest and continuing to grow, prices of new developments will increase by 5% over the next 12 months; whilst in the least popular areas, prices will continue to decrease, although at a more moderate rate than before (by around -5%).

Aguirre Newman also believes that the rate of sales of the new projects that are coming onto the market will continue to be high, “and that most, if not all, homes will be sold off-plan”. (…).

Original story: El Mundo (by Luis M. De Ciria)

Translation: Carmel Drake